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and the farmer will sell this commodity on the open market for whatever it will bring, and if it brings 2 cents, let us say cotton, under the fixed price, the Government pays the difference.

Mr. LAWSON. Was that everything he produces?

The CHAIRMAN. Well

Mr. LAWSON. This wouldn't take care

The CHAIRMAN. The Brannan plan did not envision that, either; just envisioned certain commodities.

Mr. LAWSON. For instance, cotton. This would only apply-a man would be allowed to raise all the cotton he wants, but he would have an allotment of 200 bales. If he raised more he would have to sell that at the world market, whatever he could get for it, but the Government would pay the difference between the market the day he sold the cotton and the guaranteed price.

The CHAIRMAN. That is along the same line as I understand the Brannan plan, except you would give no protection for cotton sold in foreign markets; only on that portion of his production that would be used for domestic use.

Mr. LAWSON. It is a compensatory-payment plan. Some people call it a subsidy and don't want a subsidy. But if I pay a farmer 3312 cents instead of 30 cents I am giving him a subsidy of 32 cents, and a rose by any other name is just as sweet.

At the end of each year the Government will know exactly how much the program has cost. It will discourage foreign production of cotton. It will make a free market in which the world demands for cotton will establish the price. The basic law of supply and demand will again be brought into play. It will enable our domestic mills to buy cotton in competition to foreign mills. It will eventually eliminate argument over acreage allotments. It will end a complicated and uneconomic present method of establishing loan prices on the many different grades and staples produced under the present system.

It is impossible for loan differentials to be reduced as long as the future market price and loan price remain in close proximity. The United States Department of Agriculture fixes prices on 336 different qualities of cotton for the coming year. I say it is impossible for one man, or group of men, to do this correctly. This practice causes much undesirable cotton that should be consumed to seek the loan.

As an example, last year there was a scarcity of low grades. Merchants who had sold short in the summer of 1954 were forced to bid up the price to an unreasonable level. This spring, using its customary procedure, the United States Department of Agriculture raised the loan price of low grades 1 cent per pound. This loan price made it unprofitable for cotton mills to spin them, forcing them to better grades of which there is a scarcity. As a result, low-grade cotton is pouring into the loan at prices that are out of line with other qualities.

The compensatory payment plan will avoid many questions and allow the Department of Agriculture to reduce its operating expenses, and most important it will guarantee movement of cotton for export and eliminate large surpluses hanging over the market. It will allow cotton to offer stronger competition to synthetics which are slowly but surely replacing it in the markets of the world.

Main objections to this plan would be that the Government would not know until the end of the crop year the total cost of the plan. Against this, however, is the fact that under our present system the Government is paying carrying charges on millions of bales of cotton, not knowing at what price or when it will be sold.

I have given a lot of thought to this compensatory plan and I would like to know if you have any objections to it.

The CHAIRMAN. We want to hear anything that will solve the problem. If you think it will, and is something new, just give it to us. Mr. LAWSON. We already have the laws on the books that will allow us to do this. We have a law already passed

to encourage exportation of agricultural commodities and products thereof by the payment of benefits in connection with the exportation thereof or of indemnities for losses incurred in connection with such exportation or by payments to producers in connection with the production of that part of any agricultural commodity required for domestic consumption.

Tariff is for protection, not for revenue. So, take the money out of tariff receipts and appropriate out of the Federal Treasury additional funds necessary to effectuate the program a soutlined.

As research brings forth improved methods for producing cotton, and mechanical farm equipment is used to the greatest extent, the cost of producing cotton will be reduced increasing the cotton producers income, and the amount of money necessary for the Congress to appropriate to pay the cotton producers the difference between the price he obtains for his cotton and parity income will be reduced.

We realize some cotton producers are fearful of this plan-fearful that the Congress might not continue to appropriate funds to pay the producer the difference between what he obtains for his cotton and parity income. We do not believe the Congress would make a promise to the cotton producer and not keep that promise.

4. In order to discourage production of unwanted qualities, and encourage the production of wanted qualities, it is essential that base for parity be changed from seven-eights inch to 1 inch, which will permit differences in quality prices, both above and below 1-inch staple, to reflect natural demands. To accomplish this, legislation will be required.

Export subsidy or two-price system would require appropriation out of the Federal Treasury, so why not give the consumer who is the taxpayer the benefit of the same price for cotton goods as the foreign consumer by making the price for United States cotton to domestic mills comparable to foriegn mills? The consumer-taxpayer should not be required to pay two sets of taxes, and that is exactly what would be the result of export subsidy or a two-price system. Why not increase domestic consumption of cotton, giving employment to United States labor in the cotton mills?

The recommendations we are making as to paying the cotton producer the difference between the price he receives for his cotton and percentage of parity is not original with our association. During the hearings December 4-9, 1944, before a subcommittee of the Committee of Agriculture of the House of Representatives, known as the Pace committee hearings, the then Secretary of Agriculture Hon. Claude Wickard recommended:

1. Government payments to producers of the difference between the market price and parity price or parity income;

2. The Secretary warned if the United States cotton is continued to be priced above foreign cottons we would lose our export markets and encourage increased production of cotton in foreign countries;

3. The Secretary warned of increased consumption of manmade. fibres and decreased consumption of American cotton; and

4. The Secretary warned that to continue supports above world prices of cotton and prices of manmade fibres would result in continually piling up surplus cotton in Government stocks.

The late Oscar Johnston, then president of the National Cotton Council of America, issued the same warnings and made the same recommendations at to price-adjustment payments.

The statement for the record includes verbatim the remarks of Secretary Wickard and the late Mr. Johnston.

We believe our recommendations to be sound and commend them to serious consideration by the committee and the Congress.

Senator SCHOEPPEL. I have one question. You mentioned the smaller sized farms, family-sized farms, getting an increased acreage. By that, would you suggest that those farms be increased out of the nowallocated acreage to cotton?

Mr. LAWSON. I should think, Senator, that there should be a limit below which they would not be forced to go.

Senator SCHOEPPEL. I see. By that I mean you would not want, as I get it, to give an additional acreage allocation over and above that presently existing; you would subtract it from some of the larger operators?

Mr. LAWSON. I wouldn't say that. You would have to give them additional acreage because I don't think you can treat one man different from another regardless of who he is.

Senator SCHOEPPEL. I just wanted to get your ideas.

The CHAIRMAN. Any further questions?

Mr. Cox, Mr. Singletary, and Mr. McKemie, please give your names in full and respective occupations.

Mr. Cox. I am C. K. Cox, a farmer in Mitchell County, Ga. On my left I have Mr. R. C. Singletary, a farmer.

Mr. SINGLETARY. I am representing the Southeastern Peanut Association also, in addition to being a peanut farmer.

Mr. McKEMIE. I am W. J. McKemie, a peanut farmer.

STATEMENT OF C. K. COX, CAMILLA, GA.

The CHAIRMAN. Proceed.

Mr. Cox. Mr. Chairman, and members of the committee, my name is C. K. Cox. I am a farmer in Mitchell County, Ga. I have for many years produced peanuts, cotton, tobacco, grains, livestock, and miscellaneous other crops. I have also had experience in the handling and warehousing of peanuts. I am solely responsible for the management of my farm.

I should like to thank the committee for the privilege and opportunity of expressing my thinking on the subject at hand. My remarks are based on a lifetime experience in farming.

1. In my opinion, we must have in this country a strong national farm program both for the good of the Nation as a whole and for the protection of those actually engaged in producing crops and livestock. As you gentlemen well know, most if not all of the business

and industry of this country operates with what we might term an administered price. Therefore, it is not conceivably possible, in my opinion, for farmers to operate their business in a so-called, misnamed, free economy, as has been expressed by some individuals and some groups in the recent past.

Such a national farm program should insure that farmers receive their fair share of the national income. It should be planned and administered so that there would be a protection for all the consumers and our export markets. Such a program should provide:

(a) Adequate supplies of food, clothing, and shelter at reasonable prices;

(b) Reasonable reserves for bad crop years, et cetera;

(c) Sufficient amounts of exports to take care of demands from foreign countries. Included in the export picture are also the needs of those countries whom we consider our political and military allies and who need the help this Nation is able to offer.

2. Based on a good many years of experience and observation, it is my opinion that certainly the major crops of this country should be protected through a price-support program. I also feel that the levels of price support should be reasonably high, not less than 90 percent of parity, keeping in mind that if farmers as a group are to share equitably in the distribution of the national income that their production should be marketed for 100 percent of parity or better. However, I am not asking this committee to support it at a hundred percent, but not less than 90.

It is inconceivable to expect a national program to provide high price supports without reasonable controls on supplies. As you know, we in this area who have produced cotton, peanuts, and tobacco, as well as other crops, have favored acreage allotments and marketing quotas on these crops. If a better plan for achieving this goal can be developed, certainly we would not object to the details of how this is done.

3. I should like to strongly urge that any programs for agriculture passed by Congress should not lower this gross income to farmers from the present level. An example of what I am trying to convey is this: If cotton acreage is reduced to 172 million acres or less and the present support rate is retained on the price of cotton, the total income to cotton farmers would be cut to the point where it would hurt seriously and would mean a big reduction in income from cotton which probably could not be made up from any other source. The purchasing power of cotton farmers would be drastically cut. The same principle could apply to any particular crop and to the total agricultural income as well.

I would like to point out that even though the total acreage devoted to cotton, peanuts, and tobacco has been reduced over a period of years, the income from these crops, at the present time the best information I can get is about 33 percent of the income of the farmer. About 3 or 4 years ago it was 45 percent from these basic commodities, which shows that we have had to turn to other crops to try to make up for some of the income we have lost from these basic commodities from acreage reduction and price supports.

I note that much has been said in the press lately about the twoprice plan. While it certainly has some advantages which we all recognize, it also has numerous disadvantages. Without going into a

discussion of the factors for or against such a plan, I should like to make the following observation:

Farmers should not be expected to take a greatly reduced price, world market, for their portion of their production which is exported because of the fact that so many factors other than price have influenced our exports. I feel, therefore, that this problem of exports is such a complex one that it must require the best brains and thinking of all our leaders in helping to work out some solutions. Tied closely to this, in my opinion, would be a close study of our tariff policies to see if provisions could be made which would allow more of what the farmers produce to be exported.

This doesn't just have to apply to cotton. It can apply to cotton. It can apply to tobacco, peanuts, rice, wheat, corn, or any other commodity.

It is my opinion that farmers as a group are willing to accept prices based on .fair competition, but I think it is grossly unfair to have a program which would force farmers to take reduced prices for their commodities because of economic and political situations over which they have no control.

Emphasis should be increased on research in order to develop new and expanded uses for farm products. Research programs should also include studies of ways and means for more economical production of the commodities from our farms. As a farmer, I believe that we are going to be faced in the future with a pressing need for greater efficiency in both production and marketing. Many of the answers to the problems which we will face in this field must be secured through a strong and intelligently conducted research program. This expanded research program should not only emphasize the part of Government, but should also encourage the splendid work which industries are performing in searching for and finding new uses for farm commodities.

It is my opinion that the Nation needs, and most individual farmers need, a program of assistance in soil and water conservation. The Government should continue an active interest in the conservation and improvement of soil and water resources of this country. I recognize the farmer's responsibility for the proper handling of the soil and water on his farm; however, at the same time I also recognize his inability to do many of the things necessary for the proper protection of these resources.

It is also important to note that the Nation will need the productive capacity of the soil long after that individual farmer is gone.

As a farmer, I appreciate the assistance which the Government is rendering in this field, through education, technical aid, and financial help. I think that what the Government has spent in helping farmers to carry out practical conservation on their farms has been a good investment for this Nation, and I believe we are nearer now by a good many years the goal of the full conservation of our soil and water resources.

I do not think it would be a good idea to do away with the ASC nor to reduce its financial assistance to farmers. I do not think that this assistance should be restricted entirely to permanent-type practices.

In the administration of a national farm program, it is my recommendation that the farmer committee system be continued both on

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